Department of Labor Prepares for Loss of Unemployment Benefit

Wednesday, March 28, 2012 | 08:05 am

Federal Benefits Expire Due To Lower State Unemployment Rate

NASHVILLE – The Tennessee Department of Labor and Workforce Development is making preparations to suspend unemployment benefits for claimants in the Extended Benefit (EB) program. More than 10,000 claimants who are in the last 20 of 99 weeks available will receive their last benefit payment the week of April 12, 2012.

The EB program is triggered on and off by the health of Tennessee’s unemployment rate. The trigger rate is based on a “look-back” provision of three years. To remain triggered on, the state’s current rate must be higher than 120% of the average rate three years ago. The state’s current rate recently dropped to 8.0%, dipping below the threshold to continue the program.

“Claimants who have been unemployed the longest are the ones affected by this change,” said Commissioner Karla Davis. “As Tennessee’s employment opportunities improve, other federal benefits could be reduced as well.”

Approximately 10,000 Claimants will receive notifications of the program expiration in the coming days. These claimants will not be eligible for additional benefits again until they earn qualifying wages.

In December of 2010, the United States Department of Labor informed Tennessee that it was in danger of triggering off the Extended Benefits program unless Tennessee’s General Assembly passed legislation to extend the EB “look-back” provision from two years to three years. The Tennessee General Assembly passed legislation, and Governor Haslam signed into law this three year “look-back” provision to allow Tennessee to remain triggered on to EB until Tennessee’s total unemployment rate improved enough to trigger off of the program.

In February 2012, federal legislation was enacted that changed the structure of the remaining federal benefits. It reduces the number of benefit weeks available from a maximum of 99 to 73 weeks in September 2012 and places unemployment rate triggers on the total weeks available. All federal unemployment benefits are set to expire at the end of 2012.